After absolving its current management team of any wrongdoing in an ongoing stock-options scandal, Apple shifts its attention to next week's Macworld conference here, and the much-speculated unveiling of an iPod with cellphone-like features.

The top consumer complaint at online music service Napster: Songs purchased at Napster won't play on Apple's iPod. It's not Napster's fault. Apple's hugely successful iPod business is built on a closed system. You shop at iTunes Music Store for digital songs and use iTunes software to transfer them effortlessly to the iPod.

In a bold strategic overhaul, Microsoft confirmed Thursday that it will launch Zune and Zune MarketPlace this fall in hopes of playing catch-up to Apple in the fast-emerging digital entertainment market. Tech industry analysts say the software giant had to do something drastic to keep Apple's iconic iPod and popular iTunes Store from running away with paid digital downloads of music, TV shows and movies.

Microsoft will start selling a wireless digital music and video player to compete with Apple's iPod by Christmas, sources close to the matter said Wednesday. The new player will let users download music and videos over the air, according to one source, a feature which would give it an edge over the iPod.

Microsoft struck two deals this week with sometime adversaries to take on mutual competitors. Analysts say the deals with RealNetworks and Yahoo could signal a return to Microsoft's roots of successfully challenging IBM by finding the right allies. Both agreements also show how seriously Microsoft takes competitors, including Google and Apple Computer.

The patent office is in the news these days. Congress is rewriting patent law. Tech companies grouse that it takes years to get a patent. The heart of the problem is this: The patent office is deep in a hole and is going to have a heck of a time climbing out.

Raising another legal threat to the iPod music player, Creative Technology Ltd. said it has been awarded a U.S. patent for a song-navigation technology it claims is used on Apple Computer Inc.'s market-leading devices. The digital audio company did not say how it would enforce the patent.

At least a dozen other music players are angling to steal sales away from Apple's wildly popular iPod line. In the past month, five companies have unveiled their latest iPod challengers portable music players with hard disks that can store anywhere from 1,000 to 10,000 songs.